Twelve US States Target Property Taxes [US]
Property tax reform is sweeping state legislatures. More than twelve jurisdictions are considering changes that could fundamentally alter how local governments fund schools, fire departments, and municipal services.
The stakes are substantial. Property taxes supply over 33% of all US K-12 school funding. Any reduction shifts the burden somewhere else, or cuts services.
Florida Moves First
Florida's House passed two bills on 19 February 2026 by an 80-30 vote. The proposals would eliminate non-school property taxes on primary residences through constitutional amendment. Implementation would phase in $100,000 increments annually from 2027, reaching full exemption by 2037.
Voters decide in November 2026. The Senate remains unconvinced. President Ben Albritton prioritises evaluation over the House's approach, with rival proposals expected soon.
Governor DeSantis supports reform but backs the Senate's path. School levies remain untouched under the House bills, but county and municipal revenue faces significant cuts. The legislation mandates no reductions to law enforcement or firefighter funding, using 2024/25 baselines.
Four Reform Approaches
Revenue replacement: States like Kansas, Texas, and Wisconsin propose offsetting property tax cuts with higher sales or income taxes. Experts warn these alternatives rarely generate equivalent revenue.
Constitutional amendments: Kansas, Ohio, Oklahoma, Nebraska, and Tennessee are pursuing ballot measures. Tennessee could become the first state to preemptively ban a statewide property tax.
Assessment caps: Wyoming voters will decide in November whether to exempt 50% of assessed property values from taxation. Legislators already killed a full elimination proposal this week.
Targeted exemptions: Several states are expanding homestead exemptions or senior relief programmes.
What Finance Teams Need to Know
Local government CFOs face revenue modelling challenges. Property tax reforms require recalculating millage rates, updating compliance frameworks, and stress-testing budget scenarios. Counties and municipalities without replacement revenue sources will need to identify service cuts or alternative funding.
The average Florida home could be tax-free (excluding schools) within three years under the House plan. That creates immediate cash flow implications for local treasuries.
Democrats and Senate Republicans warn the House approach risks defunding essential services. Critics argue counties face fiscal cliffs without concrete offsets. The Senate seeks a comprehensive review rather than what one legislator called a "faucet cut-off."
Wyoming and Indiana reforms demonstrate that even modest changes create major complications for school finance officials. This year's proposals are anything but modest.